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1 In Texas, ResCare’s may already be holding the state hostage. Even after the Texas Department of Human Services detailed deficiencies in its homes “that are pervasive across the chain,” ResCare continues to be a certified provider and runs more programs in Texas today than ever before. Why? “The problem is that we just don’t have places to put people,” explained a state source, who wishes to remain anonymous. “So we can’t say, ‘No, you won’t run these facilities,’ even if a provider has had problems, because Texas is committed to shutting down state institutions.” On two occasions in 1995, and again after Trenia Wright’s death the state actually threatened to deny ResCare operating licenses due to chronic compliance problems. Each time, the company responded by filing suit \(a tactic common among corporations contractsettle, on the condition that the company correct its problems. Frustrated by ResCare’s shoddy record, a 1999 report by the Texas Department of Human Services asked, “Would these facilities have continued with such a poor history of coming into compliance … if ResCare had used their profits to improve their existing facilities instead of purchasing additional facilities?” It’s a reasonable question. And the answer seems to be that market opportunities are driving ResCare to expand. With an estimated 220,000 disabled people on waiting lists for residential services, and nearly a half-million more living with family caregivers over the age of sixty, ResCare’s growth outlook has never looked brighter. LACK OF STANDARDS Alarmingly, however, ResCare’s expansion is occurring at the same time that numerous states, including Texas, are increasing enrollment in a Medicaid program known as the Home and Community-Based Services Waiver, which has almost no federal standards and only limited oversight. The waiver program was launched in 1981 to offer a more flexible Medicaid reimbursement option to people living in the community \(in three-person homes and single apartments, for examstates, the lack of oversight has prompted harsh criticism from the Health Care Financing Administration, the federal agency that administers Medicaid. “There is increasing reliance on unlicensed residential programs, which do not have to meet any ‘standards,” warned Clarence Sundram in a recent speech before the American Association on Mental Retardation. “What we are fighting is not the stark horrors of a Willowbrook that could easily galvanize even the most stone-hearted person. The risks are more subtle ones of isolation, neglect, and abandonment.” Are providers using the waiver program to evade close scrutiny? A year ago, state regulators in Florida moved to terminate a group of ResCare facilities that were rife with deficiencies including poor management, understaffing, and medical neglect. ResCare simply reopened several of the homes under the waiver program, where the company continues to receive Medicaid dollars and is subject to far less stringent oversight. The same thing happened in Texas. Shortly after the state shut down Appleridge, ResCare converted that home to 12 THE TEXAS OBSERVER the waiver program as well, where it currently operates under a newly acquired subsidiary, Educare. THE HUMAN EVIDENCE Unlike facilities in the waiver program, Medicaid’s intermediate care facilities group homes that generally have six or more clients are subject to a host of federal quality-assurance standards and routine inspections. But interviews with former ResCare employees indicate that, even here, the company can, and does, evade regulations. One evening last December, we visited the home of Terry Lockard, a former ResCare employee who used to work at the Memorial group home in Houston. There was a girl there who became ill in the spring of 1995, said Lockard, settling onto a stool in her living room. “She was an active, outgoing girl, just a great individual. But then she got sick. She started having diarrhea, throwing up her food, throwing up bile it was real bad.” The girl attended a day program, which was not run by ResCare, and workers there began asking Lockard to take her back to the ResCare facility. Lockard was dissuaded from doing that, she said, “because from 10 to 2 each day, there was no staff in the home. They didn’t want to pay the extra hours for me to be there, so I was told to keep taking her to the day program.” Eventually, Lockard said, the day program staff grew so concerned that someone called Adult Protective Services, an independent monitoring agency, and ResCare received notice that state inspectors would be coming to investigate. “The night before they came, we were real busy,” Lockard recalled. The reason, she said, is that staff should have been documenting a range of programs for clients doing laundry, washing dishes, bathing with soap three times a week. “Well, we never did,” she said. “So that night, we were instructed to get the books in order.” Even more remarkable was what happened the next morning. “When the state came, I was instructed to go to the group home, pick up the client, take the individuals to the workshop, and take the client home with me,” said Lockard, shaking her head at the memory. “I kept her there all day long, so that the state wouldn’t have any contact with her. I had her until almost 8 that night.” State investigators discovered little, and the client’s health worsened. “I would take her to Dr. Yalamanchilli he would lift her arms, open her mouth, and say she’s all right,” Lockard said. One day, exasperated, Lockard dug through the client’s medical files herself and discovered that she had been diagnosed with colitis, an inflammation of the colon that, if untreated, can be fatal. “She could have died from that infection,” said Lockard, clearly upset. “So I took the files home, made copies, and turned them over to the day program.” “I know what I did may have been illegal,” she explained. “But I’d do it again. I did it to save this client’s life.” Lockard’s account of this story was confirmed by another woman with us in Lockard’s living room, who wished to remain anonymous. She worked at the day program used by ResCare. She said that she, too, was concerned that the medical needs of clients \(including one who MAY 26, 2000 “There is increasing reliance on unlicensed residential pro grams, which do not have to meet any standards…. … What we are fighting is not the stark horrors of a Willowbrook that could easily galvanize even the most stone-hearted person. The risks are more subtle ones of isolation, ne glect, and abandonment.”